Asia-Pacific Bond Risk Little Changed, Credit-Default Swaps Show

By Paulina Duran -
Jun 11, 2013

The cost of insuring Asia-Pacific
corporate and sovereign bonds from default was little changed,
according to traders of credit-default swaps.

The Markit iTraxx Asia index of 40 investment-grade
borrowers outside Japan held at 141 basis points as of 8:18 a.m.
in Hong Kong, Royal Bank of Scotland Group Plc prices show. The
gauge jumped yesterday to its highest close since Sept. 26,
according to data provider CMA.

The Markit iTraxx Australia index was little changed at 130
basis points as of 10:19 a.m. in Sydney, according to Westpac
Banking Corp. (WBC) prices. It closed at 128.5 basis points yesterday,
the highest level since December, according to CMA, which is
owned by McGraw-Hill Cos. and compiles prices quoted by dealers
in the private market.

The Markit iTraxx Japan index remained unchanged at 101
basis points as of 10:10 a.m. in Tokyo, according to Citigroup
Inc.

Credit-default swap indexes are benchmarks for insuring
bonds against default and traders use them to speculate on
credit quality. A drop signals improving perceptions of
creditworthiness, while an increase suggests the opposite.

The swap contracts pay the buyer face value in exchange for
the underlying securities if a borrower fails to meet its debt
agreements.